open-market operation


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Open-market operation

Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply.

Open-Market Operations

The buying and selling of U.S. Treasury securities. The Federal Reserve conducts open market operations as a primary way of influencing inflation and economic growth. These securities are sold at certain interest rates as a way of controlling the money supply. See also: FOMC.

open-market operation

an instrument of MONETARY POLICY involving the sale or purchase of government TREASURY BILLS and BONDS as a means of controlling the MONEY SUPPLY. If, for example, the monetary authorities wish to increase the money supply, then they will buy bonds from the general public. The money paid out to the public will increase their bank balances. As money flows into the banking system, the banks’ liquidity is increased, enabling them to increase their lending. This results in the multiple creation of new bank deposits and, hence, an expansion of the money supply.

See BANK-DEPOSIT CREATION, RESERVE ASSET RATIO, FUNDING.

References in periodicals archive ?
The CBC may further augment the scale of the open-market operation, when necessary, to mop up excess idle fund on the market.
The People's Bank of China, which conducts regular open-market operations Tuesdays and Thursdays, has drained a net CNY83bn from the money market last week through its open-market operations.
Insiders noted that the CBC will continue mopping up flooding idle funds in the market via open-market operation.
The People's Bank of China, which carries out regular open-market operations on Tuesdays and Thursdays, injected a net CNY28bn into the money market last week through its open-market operations.
The central bank, which usually carries out regular open-market operations Tuesdays and Thursdays, drained a net CNY153bn from the money market last week.
The central bank, which performs open-market operations on Tuesdays and Thursdays, has drained a net CNY103bn from the money market last week.
The People's Bank of China (PBOC), which carries out regular open-market operations on Tuesdays and Thursdays, has drained a net CNY49bn from the money market last week.
The People's Bank of China (PBOC), which performs open-market operations regularly on Tuesdays and Thursdays, has sold CNY1bn worth of one-year bills on Tuesday.
The People's Bank of China (PBOC), which undertakes open-market operations on Tuesdays and Thursdays, has offered CNY1bn worth of one-year bills in its Tuesday operation.
The PBOC, which carries out regular open-market operations on Tuesdays and Thursdays, did not offer any repurchase agreements on Tuesday.
46bn) worth of one-year bills in its regular open-market operation on Tuesday.
China's central bank has said that will sell CNY1bn (USD150m) worth of one-year bills in its regular open-market operation on Tuesday, reports Dow Jones.